Tennessee § 35-15-1104 - Alter ego.

§ 35-15-1104. Alter ego.

Absent clear and convincing evidence, no settlor of an irrevocable trust may be deemed to be the alter ego of a trustee of such trust. None of the following factors, by themselves or in combination, may be considered sufficient evidence for a court to conclude that the settlor controls a trustee, or is the alter ego of a trustee of such trust: Any combination of the factors listed in § 35-15-1105 regarding dominion and control over a trust; Isolated occurrences where the settlor has signed checks, made disbursements, or executed other documents related to such trust as a trustee, a trust advisor or a trust protector, when in fact the settlor was not such a trustee, trust advisor or trust protector; Making any requests for distributions on behalf of beneficiaries; or Making any requests to the trustee to hold, purchase, or sell any trust property. Acts 2013, ch. 390, § 52. Compiler's Notes. Acts 2013, ch. 390, § 52 provided that: (a) Absent clear and convincing evidence, no settlor of an irrevocable trust may be deemed to be the alter ego of a trustee of such trust.” None of the following factors, by themselves or in combination, may be considered sufficient evidence for a court to conclude that the settlor controls a trustee, or is the alter ego of a trustee of such trust: Any combination of the factors listed in § 35-15-1105 regarding dominion and control over a trust; Isolated occurrences where the settlor has signed checks, made disbursements, or executed other documents related to such trust as a trustee, a trust advisor or a trust protector, when in fact the settlor was not such a trustee, trust advisor or trust protector; Making any requests for distributions on behalf of beneficiaries; or Making any requests to the trustee to hold, purchase, or sell any trust property. Section Comment. Unless provided otherwise hereinafter, any reference to “section,” “subsection” or “subdivision” means all, or such portion of, T.C.A. § 35-15-1104 . The Uniform Trust Code has no similar provision to this section. Deeming that a settlor of a trust is the alter ego of the trustee of such trust can cause multiple significant issues, including but not limited to taxation, as well as a trust’s level of spendthrift and discretionary trust protection and the effect of exercising discretion in general. Therefore, in keeping with the Tennessee trust statutes’ emphasis on freedom of disposition and settlor’s intent, this section makes it exceedingly difficult for a settlor of a trust to be deemed an alter ego of the trustee of such trust.